Brexit: Now What? Part IV

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Tolls said:
Incorrect.
It was a reduction in what the expected GDP would have been with a Remain vote.
It was not a reduction in GDP overall.
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I took that into account. The prediction of GDP without Brexit wasn't particularly rosy and the pessimistic forecast of the change in GDP was so hugely negative that it sent the overall GDP forecast negative too.

Anyway, we should consider actual forecast values, these are bad enough. If you wish to compound that by forecasting a change to an existing forecast you're just making things even more difficult to understand and making it impossible to check the forecast accuracy. When reality turns out different to the compounded forecast, was it the first forecast that was wrong, or the second one, or maybe both of them?
 
ceptimus said:
These were forecasts of the immediate effects of a Brexit vote - not what would happen after Brexit. You're admitting that it was plain wrong, but trying to justify why it was wrong.
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To quote the foreword in the very document you linked to:
"
This paper focuses on the immediate economic impact of a vote to leave and the two
years that follow.
"

The two years is important as that is the Article 50 timeline.
 
Tolls said:
To quote the foreword in the very document you linked to:
"
This paper focuses on the immediate economic impact of a vote to leave and the two
years that follow.
"

The two years is important as that is the Article 50 timeline.
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Let me get this straight. You're now forecasting a precipitous decline in UK employment over the next few months so that by the two-year anniversary of the referendum employment will have fallen in line with the remain campaign predictions rather than risen as it steadily has ever since that referendum?

It's a brave prediction for you to make and we won't have to wait very long before it's proved spectacularly wrong. I guess remain supporters must get some kind of perverse pleasure out of their inaccurate forecasting.
 
Car manufacturing in the UK fell last year for the first time since 2009.

According to new figures from the Society of Motor Manufacturers and Traders (SMMT), 1.67 million cars left UK factories in 2017, a decline of 3% compared with the year before.

New investment in the UK motor industry shrank as well, falling to £1.1bn last year, compared with £1.66bn in 2016.
 
No I'm not.

As I said above, the unemployment situation does not tally well with the lack of wage increases, especially when placed against current inflation. It is thought to be a pause while employers wait and see what's going to happen next, and employees are concerned about their positions.

But at least you agree you were wrong that the document covered the immediate aftermath of the vote.

Thought you do seem to be avoiding the whole "after Article 50" part.
 
Tolls said:
But at least you agree you were wrong that the document covered the immediate aftermath of the vote.
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Wrong again. I never agreed any such thing. The document itself states that what it covers.

The analysis in this document comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.
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Wriggle all you like but the document is clear enough for anyone to read. Anyone who makes the effort to read it will see how completely wrong it was.
 
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And I quote the bloody document above which clearly states its remit.
Two years.
 
Looking at the portion ceptimus quoted:

The analysis in this document comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain.
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Looks like a pretty good set of predictions to me:

  • Real wages are lower
  • Inflation has risen
  • Sterling has weakened
  • The housing market has cooled off
  • GDP growth has been repeatedly revised downwards despite increasingly buoyant EU and global economies

Those predictions of course related to the whole of the Brexit process, there's still a way to go, and couldn't take into account the measures that the government took to stave off any impending recession such as reducing interest rates and seeming to abandon large parts of "austerity".

The key phrase in the prediction is "compared with a vote to remain". We don't have a control economy which also had a reduction in interest rates and an abandonment of austerity to compare the current economy to.

The real (and welcome) puzzler is how robust the employment figures are. It may help that real wages are falling and I'm not sure whether there are swathes of underemployed and underpaid people out there, or millions of nominally self-employed people barely getting by but taking the figures at face value is encouraging.
 
Recession - no.
Increase in unemployment - no.
GDP 3.6% smaller - no.

...but you can still read it and think the predictions were correct? Amazing.

I used to think arguing with dowsers and religion believers was hard. I shall have to add remain supporters to my list of people that it's a waste of time trying to reason with.
 
The Don said:
Those predictions of course related to the whole of the Brexit process, there's still a way to go, and couldn't take into account the measures that the government took to stave off any impending recession such as reducing interest rates.
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That's what caused most of the inflation. Note that the Bank of England has now reversed its interest rate reduction.
 
ceptimus said:
Recession - no.
Increase in unemployment - no.
GDP 3.6% smaller - no.
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The predictions didn't take into account government actions to prevent a recession taken immediately after the Brexit vote.

We can't say now whether GDP will be 3.6% lower at the end of the article 50 process than it would have been had the Brexit vote gone the other way because:

- We're still in the middle of the exit process
- We don't have a control economy

We do know that unlike other, similar, economies our GDP figures are being revised downward instead of upwards and we are now underperforming the EU.

Unemployment is a puzzler
 
BBC News: Europol head fears loss of UK influence after Brexit

"Britain will lose influence on cross-border policing and security after Brexit, the outgoing head of Europol has told the BBC.

Rob Wainwright steps down in April, after nine years, as talks begin on what happens once the British flag leaves the Europol boardroom table.

"There will be a loss of influence, there's no doubt about that," said Mr Wainwright.

"The seat at the table will either be fully gone or half gone," he said.

"And that means there will be a loss of British influence, and I think it's a shame for the UK.

"I think it's actually a shame for our European partners as well." "
 
^^ I was just about to post that myself.
Good piece on the 'PM' show on Radio 4 tonight.
 
The Don said:
Evidence ?

As opposed, for example, other factors
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Think for yourself. What is the Bank of England's primary means of controlling inflation? What do they do if they want inflation to rise? What do they do when they want it to fall?
 
ceptimus said:
Think for yourself. What is the Bank of England's primary means of controlling inflation? What do they do if they want inflation to rise? What do they do when they want it to fall?
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I did and I figured that a 20% fall in the value of sterling may have had a bigger effect on inflation (bearing in mind that proportion of goods that are imported) than a 1/4 percent drop in base rate. Particularly because the increase in base rate back to 1/2 percent has had a negligible effect on inflation.

YMMV
 
Theresa May is now trying to scupper the transition arrangements to ensure a diamond-hard Brexit on WTO terms. That should keep Rees-Mogg happy but I'm not sure that the CBI will be quite so sanguine.

Theresa May has indicated she will fight a proposal to give residency rights to EU citizens during the transition period after Brexit.
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http://www.bbc.co.uk/news/uk-politics-42896996

Also, according to government research (which shows Brexit in a bad light and hence can be ignored) the costs of cutting EU migration would be greater than the benefits of a hypothetical US trade deal (ignoring, for now, that any deal would likely highly favour the US).

BuzzFeed News has claimed government studies on the economic impact of Brexit say reducing migration from the bloc into the UK would nullify the benefits of any trade deal struck with Washington.
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The Brexit good news just keeps on coming :rolleyes:
 
ceptimus said:
Wrong again. I never agreed any such thing. The document itself states that what it covers.



Wriggle all you like but the document is clear enough for anyone to read. Anyone who makes the effort to read it will see how completely wrong it was.
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Oooo, somebody wrote stuff. It must be true.

How naive.

See I am in that happy place that I own my own home outright, no rent/mortgage/loan/whatever. Isn't that nice?

Not really. There are a bucket of other people of my acquaintance who have Endowment mortgages, or standard mortgages, or no mortgage at all simply rent hand to mouth. And one or two homeless.

<snip>


Edited by Loss Leader: 
Edited for Rule 12.
 
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